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Property Newsletter: September 2018

Property Newsletter: September 2018

Introduction

Dear Reader,

Welcome to the September edition of the Property Newsletter from Hardwicke.

With the manic autumn period already underway, the Hardwicke property team are busier than ever. Not too busy, however, to bring you Morayo Fagborun-Bennett’s take on the First Tower Trustees case, Daniel Gatty’s three facts and Patrick Sarson revealing his untruth from the last newsletter’s unrobed section.

Simon Allison – Editor

Events

27th September 2018: Risk & Negligence in Property Transactions: problems and pitfalls for practitioners - Birmingham Roadshow

Location: Hotel du Vin, Church Street, Birmingham, Birmingham, B3 2NR
Time: 5:00pm

As the residential property market slows and returns on commercial property are threatened by the decline of the High Street, the risk that property owners will look to the professionals who advised them to recoup their losses returns.

Read more

31st October 2018: Risk & Negligence in Property Transactions: problems and pitfalls for practitioners - London roadshow

Location: Hardwicke, Hardwicke Building, New Square, Lincoln's Inn, London , WC2A 3SB
Time: 5:30pm

As the residential property market slows and returns on commercial property are threatened by the decline of the High Street, the risk that property owners will look to the professionals who advised them to recoup their losses returns.

Read more

Activity report - what we have been up to

Peter Petts obtained possession of a property for his client, which his client didn’t even know he had bought.  It took some explaining to the judge.

Steven Woolf spent most of August preparing for or waiting patiently outside Court 37 of QBD as he secured 4 more protective injunctions for different London Boroughs in the continued fight against unlawful occupation and fly-tipping.

Jamal Demachkie has had a busy Summer with lots of urgent work involving L&T disputes, claims involving allegations of fraud and breach of duty, and applications to discharge covenants.  He also took a rare holiday (which is now a long distant memory).

Daniel Gatty was on holiday for a substantial chunk of August.  Since his return his time has been taken up with matters as diverse as a partnership and co-ownership dispute between GPs and a residential development delayed by bats.

Clare Anslow has had a surprisingly busy August with a string of last minute applications in the High and County court. It has become apparent that due to the large number of CMCs she has attended this month, she is going to have an incredibly busy time in November when they all come to trial.

Andrew Skelly has had a number of FtT service charge disputes. In one of the cases the County Court, 24 years ago, had determined that the roof was within the tenant’s demise, and that the tenant was responsible to repair. The tenant, who did not appeal, now says the judge was wrong, and seeks to relitigate the point. The FtT has therefore been grappling with arguments as to res judicata issue estoppel and abuse of process.

Charlotte John has spent August book-writing and perfume-making, and resolving a number of troublesome cases, including setting aside a transfer procured by undue influence and successfully settling a farming dispute involving constructive trusts.

Morayo Fagborun-Bennett has been busy obtaining injunctions in the youth court and dealing with service charge and collective enfranchisement disputes since her return from maternity leave.

When not trying to cycle under the intense Spanish sun, Simon Allison has had 2 mediations (one successful, one not), and advised on matters as diverse as options to purchase, renewal of marina infrastructure, trespass and the ever present topic of liability for fire safety works.

Laura Tweedy has had a lovely busy August, mostly advising on TOLATA matters and acting in trials in the FTT, Mags and County Court.

Alastair Redpath-Stevens has had an interesting month with sundry day trips to various County Courts, including down to the seaside at Brighton, as well as enjoying the somewhat less picturesque scenery at the First-tier-Tribunal (Property Chamber). But he is going to Oslo to chair a charity meeting …

Comment - Morayo Fagborun-Bennett - So, when can a landlord exclude liability for misrepresentation in a lease?

Comment - Morayo Fagborun-Bennett - So, when can a landlord exclude liability for misrepresentation in a lease?

This was the question considered by the Court of Appeal in First Tower Trustees Ltd, Intertrust Trustee Limited v CDS (Superstores International) Limited [2018] EWA Civ 1396 in which a landlord (2 trustee companies) let commercial premises (4 warehousing bays) contaminated with asbestos.

Clare Anslow: Did you see? You may have missed...

Clare Anslow: Did you see? You may have missed...

Wigmore Homes (UK) Ltd v Spembly Works Residents Association Ltd [2018] UKUT 252 (LC)

Landlord & Tenant Act 1985 – Service Charges – Interim payments – Conditions Precedent – Reasonableness

The UT (LC) allowed an appeal by the leaseholder where it was argued that (1) the sums demanded on account of service charges were not reasonable because the landlord had failed to comply with the service charge mechanisms required by the Lease and; (2) that the landlord had failed to justify the sums sought.

The landlord issued proceedings in the FTT for the recovery of service charges for a 7-year period, where no payment had been made by the leaseholder. The FTT held that all sums were payable. The leaseholder appealed and permission to appeal was granted on the issue of the role of certificates in the contractual scheme of the lease and whether the lack of a certificate showing overpayments was relevant to the considerations of reasonableness.

The leaseholder’s arguments focussed around the question of whether a valid certificate is a condition precedent to the recovery of monies due in respect of a service charge or interim service charge by virtue of clause 5.1 of the Lease:

The Tenant covenants with the Landlord:

“To pay to the Landlord on the date hereof a proportionate sum on account of Service Charge to the next following 24th March or 28th September and thereafter on 25th March and 29th September in each year such sum as the Landlord shall consider is fair and reasonable on account of the Service Charge and forthwith on receipt of the Certificate (as hereinafter defined) to pay to the Landlord any balance of the Service Charge then found to be owing Provided Always that any overdue Service Charge may be recovered by the Landlord as if the same were rent in arrears.”

The UT (LC) allowed an appeal by the leaseholder where it was argued that (1) the sums demanded on account of service charges were not reasonable because the landlord had failed to comply with the service charge mechanisms required by the Lease and; (2) that the landlord had failed to justify the sums sought.

The landlord issued proceedings in the FTT for the recovery of service charges for a 7-year period, where no payment had been made by the leaseholder. The FTT held that all sums were payable. The leaseholder appealed and permission to appeal was granted on the issue of the role of certificates in the contractual scheme of the lease and whether the lack of a certificate showing overpayments was relevant to the considerations of reasonableness.

The leaseholder’s arguments focussed around the question of whether a valid certificate is a condition precedent to the recovery of monies due in respect of a service charge or interim service charge by virtue of clause 5.1 of the Lease:

The Tenant covenants with the Landlord:

“To pay to the Landlord on the date hereof a proportionate sum on account of Service Charge to the next following 24th March or 28th September and thereafter on 25th March and 29th September in each year such sum as the Landlord shall consider is fair and reasonable on account of the Service Charge and forthwith on receipt of the Certificate (as hereinafter defined) to pay to the Landlord any balance of the Service Charge then found to be owing Provided Always that any overdue Service Charge may be recovered by the Landlord as if the same were rent in arrears.”

The UT found that there was nothing in the first half of the clause which makes the payment of the interim charge dependant on certification; that requirement is only imposed for the balancing charge. The fact that the two halves are in the same clause does not affect the position. In this case the interim payment is set by reference to what the Landlord shall consider fair and reasonable and not by reference to what may be certified.

The UT therefore dismissed the leaseholder’s arguments on condition precedent in relation to the certificate. However, they rejected the argument that the lack of certificate would never be relevant to a reasonableness challenge, holding that the burden was on the landlord to show its demands were reasonable and should be justified by reference to evidence.

In this case, the UT decided that the landlord had not produced the necessary evidence to show that the demands were reasonable. Rather than remit the matter back to the FTT (which would have involved considerable additional expense to the parties) the UT remade the decision reduced the demands by 50% for six out of the seven years that were subject to challenge.

“Hardwicke Unrobed” - Get to know us better

Each month, a member of the Hardwicke property team gives us three facts about themselves. But only two are true. Can you guess which two?

Below, Daniel Gatty gives us his three facts – the answers will be revealed next month. But first, Patrick Sarson explains which fact was false last month:

Patrick explains which fact was false last month:

  1. I have 20 pairs of Dr Martens shoes, all are black and / or white and most are limited edition.
  2. Despite enjoying most alcoholic beverages, I am actually allergic to Tequila.
  3. My family live in the birthplace of Robert Catesby, the leader of the Gunpowder Plot.

Patrick explains:

  1. True – I fear I may have an addiction at this point, especially after buying my second pair of almost identical sandals at the beginning of last month.
  2. False – the only thing I can’t physically drink is Sambuca, which is mostly down to the taste rather than any allergy.
  3. True – it’s currently for sale so I can send you the particulars if you’re interested!

Daniel Gatty’s facts:

  1. After leaving university I was paid to watch television for 18 months.
  2. I used to be a tabloid journalist.
  3. Some of my photographs have appeared in an exhibition.

Contact us

If you would like to discuss any of the topics in this newsletter, please contact a member of our Practice management team.

This edition of the Hardwicke Property team newsletter was edited by Simon Allison.

To find out more about our Property team and their work, visit the Property page on our website.

If you would no longer like to receive a copy of this newsletter, please contact events@hardwicke.co.uk.  You can view our privacy notice here.

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